Do credit rating companies like CRISIL/ICRA play a significant role in investment decisions?
Credit ratings impact company’s borrowing costs. Companies with good credit rating are able to borrow money at comparatively lower interest rates than companies with weaker credit rating. This indirectly impacts the expenditure via interest rate cost.
Thus credit ratings do play a role in investment decisions especially in debt market and indirectly in equity markets.
Just adding a bit more to what Ajay mentioned...
Credit rating should be taken with pinch of salt, especially because they too are prone to biases. Besides there have been, in the past, multiple instances where circumstances point to possible corruption situations within few well established credit rating agencies.
As with anything else, tread carefully!